Fitch reduces Morocco’s credit rating to “high risk”

Downgrading by one degree from BBB- to BB + is not an easy matter for the government, as it means that two of the three major credit rating agencies are in the highest risk category, which may lead to higher borrowing costs.

Fitch said “the authorities It aims to limit the deterioration in public finances, but the continuing impact of the pandemic on the budget and plans to expand the scope of social services amid rising unemployment will complicate efforts to achieve stability at the level of Debts“.

Moody’s has not previously rated Morocco, West, sunset It has been in the investment-worthy category for more than two decades, while Standard & Poor’s places it at the lowest level in the investment-worthy category, but this month it nominated Morocco to downgrade.

In late September, the Moroccan Minister of Economy, Mohamed Ben Chaaboun, presented “grim” figures regarding the outcome of the current year’s budget, which was greatly affected by the repercussions of the Corona pandemic.

In a presentation before Parliament on the implementation of the 2020 budget and the 2021 Finance Bill, he highlighted بن شعبونThe budget deficit exceeded 55.5 billion dirhams (about 6 billion dollars), an increase of 25 percent compared to the previous year. While it is expected that the gross domestic product will decrease by 5 percent.

I was touched The budgetThe significant decline in tax revenues and sectors vital to the Moroccan economy, as a result of the epidemic and the succession of two years of drought, in exchange for a significant increase in the level of expenditures to face the economic and social repercussions of the health crisis linked to the virus Corona.